Capital Gains Tax for New Mexico (2026)
New Mexico (NM) Key Facts
State Capital Gains Rate
5.9%
Taxed As
Ordinary income
Federal Rate Applies
Yes (0%, 15%, or 20%)
Long Term vs Short Term
Both taxed at state level
How This Calculator Works in New Mexico
This calculator estimates your combined federal and New Mexico capital gains tax. Enter your gain amount, holding period, and income to see your estimated tax.
New Mexico Overview
New Mexico taxes capital gains as ordinary income at up to 5.9%, but offers a 40% deduction for certain long-term capital gains. Federal capital gains taxes also apply, with long-term rates of 0%, 15%, or 20% depending on income. The combined state and federal burden should be considered when planning asset sales or investment strategies.
How New Mexico Compares
New Mexico's capital gains rate of 5.9% compares to Arizona at 2.5% and Texas at 0%. State capital gains taxes significantly impact net investment returns.
| State | Top Rate | Notes |
|---|---|---|
| Arizona | 2.5% | Arizona has a capital gains rate of 2.5%. |
| Texas | 0% | Texas has a capital gains rate of 0%. |
| Colorado | 4.4% | Colorado has a capital gains rate of 4.4%. |
New Mexico's capital gains rate of 5.9% compares to a national average of approximately 5.04%. This is above the national average.
Tips for New Mexico Residents
- 1New Mexico taxes capital gains as ordinary income at up to 5.9%, but offers a 40% deduction for certain long-term capital gains.
- 2Federal long-term gains (held 1+ year) are taxed at 0%, 15%, or 20%. New Mexico's state tax applies on top of the federal rate.
- 3Hold investments over one year to qualify for lower federal long-term rates rather than ordinary income rates.
- 4Tax-loss harvesting—selling losing investments to offset gains—reduces both federal and New Mexico state capital gains tax.
- 5Consider the combined federal + state rate when planning large asset sales. The total can exceed 29.7% for high earners.